Who Will Help Sam Bankman-Fried Raise $8 Billion? Perhaps not Richard Handler, chief executive of Jefferies, who says he reached out in the summer only to be rebuffed. A direct banker is probably no longer needed: a restructuring specialist would seem more appropriate now that the Bahamian regulator has frozen FTX’s assets, but FTX doesn’t seem to have one. The FT reported yesterday that SBF appears to be running the entire fundraising process via SMS itself. “He doesn’t have a boyfriend“, one investor said.
Considering that SBF is an unconventional person who plays League of Legends during investor meetings and having never had any trouble raising money before, this is not surprising. If you’ve always been everyone’s sweetheart, you don’t need a professional matchmaker. But sometimes it helps to develop.
The more that is revealed about FTX, the more it becomes apparent that many people there had great ambitions but a lack of experience. As we reported yesterday, Constance Wang, COO of FTX previously spent two years on the Credit Suisse analyst program; Caroline Ellison, CEO of Alameda Research (the FTX-owned market maker whose apparent $10 billion loan from FTX started it all) previously spent about a year and a half on Jane Street. “The whole operation was run by a bunch of kids in the Bahamas,” a person familiar with the matter told CoinDesk.
The key players at FTX appear to be nine people who live together in the luxury Bahamian penthouse owned by the company. They include SBF, Ellison, technical director Gary Wang and FTX engineering director Nishad Singh. Coindesk says everyone is or used to be in relationships with each other. Ellison previously dated Bankman Fried.
Because the doors are closed, few people outside the FTX dorm know what is going on. However, Reuters has a good account of how this came to be. Between May and June, it says, Alameda Research suffered a series of losses, including $500 million on a loan to Voyager Digital. FTX tried to support Alameda and money was transferred. Some of the money that was moved appears to have been client funds.
It is unclear how much the residents knew. Reuters suggests that SBF may have told someone, although it can be assumed that Ellison knew at Alameda. Anyway, when Bankman Fried told most of the FTX employees about the Binance takeover plan, it came as a terrible shock. Some employees kept their life savings on FTX and may no longer be able to access them. Most were paid with FTX’s FTT token, which has fallen 80% in recent days. It turns out that being led by a group of funny people living together in a luxury penthouse isn’t such a good idea after all.
Separately, news of who was let go at Barclays leaked early this week and it’s not all investment banks. The Trade reports that Barclays’ layoffs include various stock trading staff, some of whom worked on the electronic product. They include: Max Tilley, a director in e-commerce; Robin Wiseman, head of quantum computer science (probably); Matthew Rogers, managing director and EMEA head of high-touch sales trading; Neil McKay, Head of European Events Trading; and William Fu, a stock trader.
Meanwhile…
1) I’m sorry. That’s the biggest thing.
I screwed up and should have done better.
— SBF (@SBF_FTX)
November 10, 2022
Silicon Valley poured money into FTX. Within seven months of launching a fundraising program in the summer of 2021, it raised more than $1.9 billion from more than 70 investors. (WSJ)
Hedge funds had preferred to work with FTX over Binance. (Economic Times)
Cuts are in fashion. Amazon shares surge 15% on news they are reviewing costs. (Bloomberg)
Of the 830 employees released on Twitter, 360 have the word “engineer” in their job title. They include 26 machine learning engineers. (Gizmodo)
Coinbase cuts another 60 jobs. (Bloomberg)
Coinbase shares are down 80%, but it’s different from FTX: it doesn’t lend money and it’s doneare its customers’ assets and liabilities and cash. (Economic Times)
Kene Ejikeme, one of Goldman Sachs’ new partners, is a former professional rugby player. (Bloomberg)
It was not easy to merge Morgan Stanley and Dean Witter, says John Mack. “The two cultures just merged.” At Dean Witter, no one challenged the boss. “The Morgan Stanley culture was that you speak up if you think it can be done in a more efficient way, a better way, a more profitable way. You would speak up. It just didn’t happen.” (Yahoo)
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